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Illinois Emcasco Insurance Co. v. Tufano

Court of Appeals of Illinois, First District, Fourth Division

September 8, 2016

ILLINOIS EMCASCO INSURANCE COMPANY, Plaintiff-Appellee,
v.
ERIN TUFANO, EARLE TUFANO, and MARY S. TUFANO, Defendants-Appellants.

         Appeal from the Circuit Court of Cook County, No. 14 CH 4901 Honorable LeRoy K. Martin Judge Presiding.

          JUSTICE ELLIS delivered the judgment of the court, with opinion. Justices Howse and Cobbs concurred in the judgment and opinion.

          OPINION

          ELLIS, JUSTICE

         ¶ 1 Defendant Erin Tufano (Tufano) was a passenger in a car that collided with another car. As a result, she suffered significant, permanent injuries that she valued in the millions of dollars. She sued both drivers. One driver had a $100, 000 insurance policy that was tendered in full to Tufano. The other driver had a $300, 000 insurance policy that likewise was tendered (resulting in a payment of $295, 000). Tufano also had underinsured-motorist coverage of her own in the amount of $500, 000 with plaintiff Illinois Emcasco Insurance Company (Emcasco).

         ¶ 2 In this declaratory-judgment action, Emcasco says that it is only required to cover the difference between what Tufano received from the two drivers collectively ($395, 000) and what she contracted for with Emcasco ($500, 000), so that Emcasco only owes her $105, 000 in underinsurance coverage. Tufano, on the other hand, says that she should be able to apply the $500, 000 underinsurance coverage as to each driver separately, such that she would receive $400, 000 in underinsurance coverage for the first driver (who was only insured for $100, 000) and $205, 000 in underinsurance coverage from the second driver (who paid $295, 000), for a total of $605, 000 from Emcasco.

         ¶ 3 Emcasco moved for judgment on the pleadings, and Tufano moved for summary judgment. The circuit court agreed with Emcasco and entered judgment in its favor.

         ¶ 4 Based on long-settled case law, we disagree with the ruling of the circuit court, which adopted Emcasco's position. Emcasco may not collectively offset the sum total paid by the two drivers ($395, 000) from its $500, 000 underinsured-motorist policy and claim that it only owes Tufano $105, 000. Rather, we agree with Tufano that each instance of underinsurance must be considered individually. Viewed in that way, Tufano would ordinarily be entitled to receive $400, 000 in underinsurance coverage for the first driver (who was only insured for $100, 000) and $205, 000 in underinsurance coverage for the second driver (who paid $295, 000), for a total of $605, 000. But Tufano's underinsurance policy with Emscasco was only for $500, 000, and she cannot receive more than the $500, 000 for which she contracted, and on which the policy premiums were based. Thus, we disagree with Tufano that she is entitled to $605, 000; at most, she could receive $500, 000 from Emcasco for the underinsurance of the two drivers.

         ¶ 5 We vacate the trial court's ruling and remand for further proceedings. On remand, the court shall enter summary judgment in favor of Tufano on the question of liability. On the question of damages, Tufano is entitled to no more than $500, 000 from Emcasco. But because Tufano's actual damages from the car accident have not been determined as a matter of fact or stipulation, and to prevent Tufano from obtaining a double recovery, the trial court must conduct a hearing to determine the extent of Tufano's damages and whether they exceed what the two drivers have already paid her, and to the extent they do, she will be entitled to recovery from Emcasco up to $500, 000.

         ¶ 6 I. BACKGROUND

         ¶ 7 The relevant facts are not in dispute. On July 2, 2013, two vehicles were involved in a collision in McHenry Township. One vehicle was being driven by Margaret Zienkiewicz and the other by Nicole M. Mann. Erin Tufano, a passenger in the vehicle being driven by Zienkiewicz, sustained serious injuries including an intracranial subarachnoid hemorrhage, lacerations of internal organs, cognitive deficits and numerous fractures. Her claimed damages from the collision are in the millions of dollars.

         ¶ 8 At the time, Tufano was covered under an auto insurance policy that had been issued by plaintiff, Emcasco, to Earle Tufano and Mary S. Tufano. The Emcasco policy provided underinsured-motorist coverage with a combined single limit of $500, 000 per accident.

         ¶ 9 Zienkiewicz's vehicle was insured by State Farm Insurance Company (State Farm) with bodily injury limits of $300, 000 per person and $300, 000 per each accident. State Farm paid $295, 000 to Tufano. Mann's vehicle was insured with Allstate Insurance Company (Allstate) with bodily injury limits of $100, 000 per person and $300, 000 per each accident. Allstate paid $100, 000 to Tufano. Because the policy limits on each of these policies were less than the underinsured-motorist insurance policy limit held by Tufano, both Zienkiewicz's and Mann's vehicles were, by definition, "underinsured." See 215 ILCS 5/143a-2(4) (West 2012) ("underinsured motor vehicle" means a motor vehicle involved in a bodily injury or death where the coverage on that vehicle is less than the insured's underinsurance coverage limit).

         ¶ 10 Tufano's underinsured-motorist coverage with Emcasco provided as follows: "Underinsured Motorists Coverage" * * * LIMIT OF LIABILITY The limit of liability shown in the Schedule or in the Declarations for Underinsured Motorist Coverage is our maximum limit of liability for damages because of 'bodily injury' resulting from any one accident. This is the most we will pay regardless of the number of: 1.'Insureds'; 2.Claims made; 3.Vehicles or premiums shown in the Declarations; or 4.Vehicles involved in the accident." The Emcasco policy also contained the following "set off" provision: "Except in the event of a 'settlement agreement, ' the limit of liability for this coverage shall be reduced by all sums paid because of the 'bodily injury' by or on behalf of persons or organizations who may be legally responsible."

         ¶ 11 After recovering payment from Zienkiewicz's and Mann's insurers for the combined total of $395, 000, Tufano made a claim under the Emcasco policy for underinsured-motorist coverage. Pursuant to the above policy provisions, Emcasco provided Tufano with $105, 000 in underinsured-motorist coverage for her injuries ($500, 000 minus $395, 000). Tufano accepted the payment but with a reservation of rights, maintaining that she was entitled to additional payment, specifically that Emcasco was obligated to provide $500, 000 of underinsured-motorist coverage for each underinsured tortfeasor involved in the collision.

         ¶ 12 Emcasco filed a complaint for declaratory judgment against defendants seeking a determination that it was not obligated to provide any additional coverage to Tufano. Emcasco then moved for judgment on the pleadings, claiming that it owed Tufano nothing more than the $105, 000 it already paid.

         ¶ 13 Tufano moved for summary judgment, claiming that the policy provisions on which Emcasco relied violated the public policy of placing an insured in the same position she would have been in had the two drivers been insured to the extent of her underinsured-motorist coverage, $500, 000. Had each of these drivers had $500, 000 in coverage, she argued, she would have received $1 million from them collectively, but instead she only received $395, 000 due to the limits of their insurance coverage. Thus, in her view, Emcasco owed her the difference between what she did receive and what she should have received, or $605, 000.[1]

         ¶ 14 After hearing arguments on the cross-motions, the trial court granted judgment on the pleadings in favor of Emcasco and denied Tufano's motion for summary judgment. This appeal followed.

         ¶ 15 II. ANALYSIS

         ¶ 16 A. Emcasco's Liability to Tufano

         ¶ 17 We review de novo a circuit court's rulings on both a motion for summary judgment and a motion for judgment on the pleadings. State Bank of Cherry v. CGB Enterprises, Inc., 2013 IL 113836, ¶ 65. Summary judgment is proper only where the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Id. Similarly, a judgment on the pleadings is properly granted if the pleadings alone disclose no genuine issue of material fact, and the movant is entitled to judgment as a matter of law. Gillen v. State Farm Mutual Automobile Insurance Co., 215 Ill.2d 381, 385 (2005). Where parties file "cross-motions" for judgment on the pleadings and summary judgment, they agree that only a question of law is involved and invite the court to decide the issues ...


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